Fundamentals of International Business

Currency Exchange Activities

Overview:

International businesses must deal with currency exchanges when creating contracts with foreign partners—but is it always worthwhile? Instructions

Step 1 – Assume your U.S. business uses an Indian distributor to reach customers in India. Your distribution contract requires a $100,000 payment from your firm for transportation services. However, analysis has shown that using this distributor saves approximately 7 million rupees in local distribution costs.

Step 2 – Using one of the many exchange rate information sites available online, look up the current exchanges rates for the dollar and rupee. In addition, look up investment articles and information regarding the recent history and future predictions for these currencies.

Step 3 – Comparing distributor costs to the local savings your company believes it has. Is the contract a worthwhile arrangement? Why or why not? Also report on the future of the currencies in question. Do you believe the positive or negative effects will continue unchanged, worsen, or improve?

I need to write a report or summary to explain these 3 steps...